Ausdal Financial Partners

What L Bondholders Need to Know About GWG Holdings, Inc.’s Chapter 11 Plan

Published on: April 22, 2023 | by Iorio Altamirano

On April 21, 2023, United States Bankruptcy Judge Marvin Isgur approved GWG’s Disclosure Statement that will be sent to creditors to vote on GWG’s Chapter 11 Plan (the “Plan”). The approval of the Disclosure Statement comes one year and one day after GWG filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Southern District of Texas.

The Plan will now be sent to creditors, including L Bondholders, to accept or reject the Plan. GWG’s Plan is essentially an “orderly” liquidation. If the Plan is accepted, GWG will be liquidated in accordance with the terms of the Plan. If the Plan is rejected, GWG will likely be liquidated in accordance with Chapter 7 of the United States Bankruptcy Code. Either way, GWG will be liquidated and will not continue as a business. Creditors will need to decide which path of liquidation will be more favorable to them.

We believe that it is highly unlikely that L Bondholders will obtain a quick and full recovery through either the Chapter 11 Plan or a Chapter 7 liquidation.

GWG Bankruptcy Update (March 14, 2023): GWG Appears to be Headed Toward Liquidation

Published on: March 14, 2023 | by Iorio Altamirano

**Update – April 22, 2023:** On April 21, 2023, the Bankruptcy Court approved GWG’s further revised Disclosure Statement for its Second Amended Reorganization Plan. The Plan will now be sent to creditors, including L Bondholders, to accept or reject the Plan. For more information, please visit our most recent blog post: What L Bondholders Need to Know About GWG Holdings, Inc.’s Chapter 11 Plan.

**Update – April 13, 2023:** On April 13, 2023, GWG submitted a revised Disclosure Statement for its Second Amended Reorganization Plan that provides creditors with more information about potential recoveries. However, the amount bondholders will recover under the proposed restructuring plan remains extremely uncertain and will likely take multiple years to bear fruit. To read more, check out our latest blog post: GWG Bankruptcy Update (April 17, 2023): Liquidation Options Become Clearer as Recovery for Bondholders Remain Uncertain

As GWG Holdings, Inc. continues to navigate the bankruptcy process, Iorio Altamirano LLP urges L bondholders to contact the firm to evaluate their other legal options to recover their investment losses. Iorio Altamirano LLP represents GWG L Bondholders throughout the country in FINRA arbitration claims against the brokerage firms and financial advisors that recommended and sold the L Bonds to retail investors.

Broker-Dealers Sold GWG L Bonds Using Aggressive and Misleading Marketing

Published on: February 1, 2023 | by Iorio Altamirano

In a court filing made on December 15, 2022, in the Chapter 11 bankruptcy court, the Official Committee of Bondholders of GWG Holdings Inc. (“Bondholder Committee”) alleged that broker-dealers sold GWG L Bonds using aggressive and misleading marketing even after it became clear that GWG’s business was failing and that the only way to repay bondholders was to continue to sell more L Bonds to existing and additional retail investors. The Bondholder Committee, which represents the interests of GWG L Bondholders in the Chapter 11 bankruptcy proceeding, alleged that “GWG was a class Ponzi Scheme.”

However, much of the court filing, including specific allegations of wrongdoing, was filed under seal.

On February 1, 2023, the United States Bankruptcy Court for the Southern District of Texas unsealed several significant court filings, including a draft adversary legal complaint against certain current and/or former directors and officers of GWG Holdings, Inc., individuals, and corporate entities affiliated with or controlled by Brad Heppner, transferees of certain fraudulent transfers, and key broker-dealers who marketed and sold L Bonds.

“GWG Was a Classic Ponzi Scheme” – Official Committee of Bondholders of GWG Holdings, Inc.

Published on: December 28, 2022 | by Iorio Altamirano

**Update: February 1, 2023** On February 1, 2023, the United States Bankruptcy Court for the Southern District of Texas unsealed several significant court filings, including a draft legal complaint. The complaint was filed by the Official Committee of Bondholders of GWG Holdings Inc. (“Bondholder Committee”) against certain current and/or former directors and officers of GWG Holdings, Inc., individuals, and corporate entities affiliated with or controlled by Brad Heppner, transferees of certain fraudulent transfers, and key broker-dealers who marketed and sold L Bonds. The Bondholder Committee represents the interests of GWG L Bondholders in the Chapter 11 bankruptcy proceeding.

The unsealed complaint has revealed the following allegations, which were made after the bondholder committees reviewed documents and information that are currently not in the public domain:

Together with other insiders, Brad Heppner was the mastermind behind a Ponzi scheme whereby GWG, in conjunction with its broker-dealer network, sold hundreds of millions worth of L Bonds to retail investors even when it became clear that the only way to repay those investors was to sell yet more L Bonds to more retail investors.

GWG L Bond Investors Seek Recourse After GWG Holdings, Inc. Files for Chapter 11 Bankruptcy

Published on: April 20, 2022 | by Iorio Altamirano

After months of working with legal and financial advisors to try and restructure outside of court, on April 20, 2022, GWG Holdings, Inc. filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Southern District of Texas. The bankruptcy filing is a significant and troublesome development for GWG L Bond investors who invested substantial portions of their life savings into GWG L Bonds. According to GWG’s latest filing with the SEC, GWG has more than $1.6 billion in aggregate principal outstanding to GWG L Bond investors. A Chapter 11 bankruptcy will allow GWG Holdings to propose a reorganization plan.

Investment News has reported that one anonymous GWG L bond investor estimates that the GWG L Bonds may now be worth 20 to 30 cents on the dollar. Despite the unwelcomed news, GWG L bond investors are not without recourse. Many retail investors, including those represented by securities arbitration law firm Iorio Altamirano LLP, are filing securities arbitration claims against brokerage firms that sold these speculative, high-risk, and illiquid financial products. These actions are separate and in addition to the bankruptcy proceedings.

GWG Holdings’ bankruptcy filing revealed for the first time that the ongoing investigation by the United States States Securities and Exchange Commission (SEC) includes an examination of sales practices of the GWG L Bonds by the Selling Group, including Emerson Equity LLC and its network of regional broker-dealers. According to the recent bankruptcy filing, the SEC issued subpoenas and document requests to individual brokerage firms beginning in late-2021.

GPB Investors Have Won Monetary Awards in 10 of 11 Arbitration Cases This Past Year

Published on: November 18, 2021 | by Iorio Altamirano

Over the past calendar year, GPB Capital investors have won over $2.4 million in monetary awards in 10 out of 11 (nearly 91%) arbitration claims that have proceeded to a final hearing. According to public records, many other claims filed against broker-dealers who sold the private placements offered by GPB Capital have been settled for monetary compensation.

The judgments and awards come after years of filing lawsuits and arbitration claims by GPB Capital investors.

For our latest posts related to GPB Capital, please click here.

Iorio Altamirano LLP Investigates Ausdal Financial Partners, Inc. Over GPB Funds

Published on: April 28, 2021 | by Iorio Altamirano

Ausdal Financial Partners, Inc. is a broker-dealer based in Davenport, Iowa. According to publicly available records filed with the SEC, Ausdal Financial Partners, Inc. likely received sales compensation for selling the GPB funds to retail investors.

Iorio Altamirano LLP is investigating claims on behalf of defrauded investors who were victims in the GPB funds scheme. The GPB funds were marketed to independent broker-dealers and investment advisers who would in turn sell the GPB funds to their retail investors.

If you lost money in GPB funds with Ausdal Financial Partners, Inc., you may have a claim.